You are here: Home - Saving & Banking - News -

Get on the right track

0
Written by:
21/02/2006

Investors in trackers have been warned against over-exposing themselves to specific stock risk in oil, pharmaceuticals, banks and commodities.

The top 10 holdings in the FTSE 100 account for nearly half (49.3%) of the index’s weighting and are predominantly made up of such stocks, for example, Shell, HSBC and GlaxoSmithKline. The performance of this sector has been unstable over the past five years, according to New Star Investment Funds, resulting in significant risks to the private investor that are not always properly acknowledged.

Phil Wagtstaff, managing director, UK marketing and sales at New Star, said: “Big is not necessarily beautiful. By buying a FTSE 100 tracker, you are hostage to the fortune of just a handful of companies. If these companies fail to perform, you are stuck with them – and stuck with a poor performing fund.”

Wagstaff advised investors to choose an actively managed fund instead, allowing portfolio holdings and risk to be managed in changing market conditions.

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Pension penalties for footballers and trapeze artists

Professional footballers, trapeze artists and badminton players are among those who could face high tax charges on retirement, due to...

Close